Republican senator floats resolution to overturn Labor Department’s ESG rule

A Republican senator has introduced legislation to overturn the Department of Labor’s new rule permitting retirement plan fiduciaries to consider climate change and other environmental, social and governance factors when selecting investments and exercising shareholder rights.

Sen. Tom Cotton, R-Ark., introduced a joint resolution Thursday, which states that Congress “disapproves” of the Labor Department rule and “and such rule shall have no force or effect.”

“Retirement plans should prioritize investments with the highest return, not ESG scams,” Mr. Cotton said in a statement.

The resolution will not move in a Democrat-controlled Senate, but further demonstrates Republicans’ animosity to the latest Labor Department rule-making.

The department on Nov. 22 finalized its Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights rule. The rule was first proposed in October 2021 and is a reversal of two rules promulgated under the Trump administration. The Trump-era rules issued in 2020 said retirement plan fiduciaries cannot invest in “non-pecuniary” vehicles that sacrifice investment returns or take on additional risk and outlined a process a fiduciary must undertake when making decisions on casting a proxy vote.

The department’s Employee Benefits Security Administration “believes a final rule is necessary to reverse the 2020 rule’s chilling effect on the integration of ESG factors into the investment selection and asset management process,” said Lisa M. Gomez, assistant secretary for employee benefits security, in a call with reporters Nov. 22.

The new ESG rule will take effect Jan. 30.

Content Source

News Press Ohio – Latest News:
Columbus Local News || Cleveland Local News || Ohio State News || National News || Money and Economy News || Entertainment News || Tech News || Environment News

Related Articles

Back to top button